Opening a Public Recreation Area to Revitalize Coastal Communities and Preserve Natural Resources in Louisiana: The Case of Elmer's Island

Journal of Agricultural and Applied Economics, Aug 2005 by Paudel, Krishna P, Caffey, Rex H, Devkota, Nirmala, Hall, Larry M

The income capitalization approach is used, based on expenditure and nonmarket values collected from travel-cost and contingent valuation methodologies, to measure the feasibility of running a self-sustaining recreational site in coastal Louisiana. Through Internet and intercept surveys, a total of 2,696 respondents, 88% of them anglers, provided information on economic expenditures, destination preferences, and preferences for specific site amenities regarding Elmer's Island. The purchase and subsequent opening of the area to the public were found to be self-sustaining even when considering conservative economic estimates.

Key Words: coastal community revitalization, market valuation, nonmarket valuation, public purchase of private recreational area

JEL Classifications: O13, Q26

Coastal areas in the southern United States and elsewhere have been impacted by environmental and financial problems. In Louisiana, for example, 4,920 km^sup 2^ have been lost in the past century, primarily due to anthropogenic factors. Current rates of coastal land loss are 50-65 km^sup 2^ a year, a situation that disrupts the economy and livelihood of coastal parish residents (Barras). Federal and state governments have invested money in restoration efforts at a cost that now exceeds $500 million, and additional support is being requested at the multibillion-dollar level. Coastal restoration projects may be cost-prohibitive and, even if implemented, may take several decades to achieve their goals. Additionally, the community may one day abandon the area, causing unwanted population pressure in other neighboring areas.

As coastal infrastructures decline, the direct impact is most often felt by local economies. This translates into the need to support and preserve coastal resources at the community level. Significant costs can be incurred in the purchase, management, and maintenance of coastal areas. From the benefit-cost analysis perspective, a community would be willing to participate only if the realized benefit to society is higher than the cost incurred in preserving natural resources. Many public areas can be maintained while supporting the ecosystem and local community, the latter often dependent upon the tourist trade. We examine the economic feasibility of coastal resource use for community viability. The economic tools used in this assessment are market and nonmarket valuations of a recreational site visit. Additionally, we examine this issue using a traditional income capitalization approach. By doing so, we gauge the feasibility of a public purchase of private property to protect the integrity of the ecosystem and to support the local community.

Background

Louisiana's abundant coastal resources have attracted an increasing amount of consumptive and nonconsumptive tourists in recent years; however, most of the state's coastal region is comprised of isolated marsh, and very few areas are accessible by road. Of particular importance is Elmer's Island, located approximately 50 miles due south of the city of New Orleans (Figure 1). Although commonly referred to as an "island," Elmer's Island is actually a 1,160-acre tract of coastal land comprised of interior wetlands and adjoining seashore. Elmer's Island is a continuation of one of only three land-accessible beaches on the Louisiana coast.

For the past 30 years, Elmer's Island has been operated as a commercial campground and primitive area. The property has become a popular destination for many thousands of Louisiana citizens and out-of-state tourists (Curole and St. Pe). For a nominal fee, users have had access to the location for fishing, bird watching, camping, and beachcombing. The area also provides significant habitat for numerous bird species and other forms of coastal marine life. In the summer of 2001, the land was closed to the public and advertised for sale. A resolution calling for state purchase and management of Elmer's Island was developed by the Louisiana Wildlife Federation in 2002 and unanimously supported by the Louisiana Legislature in April 2003 (Baldone et al.).

Survey Methods

A survey questionnaire was developed based on the travel-cost method (TCM), a standard approach for estimating the value of a recreational site based on the cost of traveling to the site (Emmert; Farber 1988; Garrod and Willis). The basic premise of the TCM is that demand for a particular site is a function of travel time and expenses incurred in visiting that site. Thus, site value can be represented by the number of trips taken by different users with different travel costs. Additional questions in the survey focused on demographics, primary recreation categories, and specific preferences for preservation or development. Finally, a subset of questions, based on the contingent valuation method (CVM), was included to provide estimates of specific nonuse values.

The survey was implemented using two modes of data collection. Most responses (92%) were obtained using an Internet survey developed by using Microsoft FrontPage, Version 2002. The Internet survey was hosted on a Web server in the LSU Department of Agricultural Economics and Agribusiness, and responses were auto-loaded into a spreadsheet database maintained in Microsoft Excel, Version 2002. The database contained 120 columns of coded output representing 34 survey questions. Browser type, date, time, and remote computer identity were recorded. Duplicate responses were identified and deleted for any submissions sharing the same Internet protocol (IP) address.